$68,505 cell phone charge? “Bill shock” relief on the way

Heard the one about the $68k cell phone bill? The FCC has, and today it …

The Federal Communications Commission proposed new rules today that would alert smart phone users when their mobile phone usage is about to ring up "unexpected charges"—a phenomenon commonly referred to as "bill shock."

The recommendations come as the FCC disclosed that it has received numerous complaints, including one about a $68,505 cell phone bill.

As FCC attorney Rebecca Hirselj put it at today's Open Commission meeting, the proposals would require that mobile service providers offer, first, "automatic notifications, such as voice or text alerts, when subscribers are approaching or reach a monthly allotment limit of voice, text or data usage that would result in overage charges."

Second, carriers would have to provide "automatic notifications when consumers are about to incur international or other roaming charges in excess of their normal rates."

More shockers

The Notice of Proposed Rulemaking arrives as the FCC releases shocking new statistics on the bill shock problem. Among them:

764 people complained to the FCC about wireless bill shock in the first half of 2010.

67 percent of those complained about amounts of $100 or more.

20 percent had complaints of $1000 or more.

The largest complaint received during this time was for $68,505.

In May, the Commission released a report suggesting that about 30 million Americans have experienced bill shock "in one form or another."

The FCC's Notice also notes that many consumers are unaware of tools they can deploy to prevent nasty bill surprises, such as usage caps. And so it proposes that carriers make "clear and ongoing disclosure of any such tools that they offer, including any applicable fees for those services."

With reservations

The Notice received support from the FCC's senior Republican Commissioner, Robert McDowell, with some reservations. In his comments, he acknowledged those 764 bill shock complaints in the agency's new report. But, "although that made it into the white paper, America is home to an estimated 295 million mobile wireless subscribers," McDowell noted. His point: bill shock should be considered "in the context of all of the data that is currently available."

Most of the carriers push back against these proposed regulations, arguing that they already provide consumers with a wide variety of tools for keeping up with their mobile bills. Sprint, for example, sent us a copy of the provisions it offers, including a plan in which, for the first six months of the contract, new customers receive email notifications if they have incurred $10 or more in text, voice, or data overcharges.

"We agree with the FCC that the goal is to keep all customers happy," CTIA - The Wireless Association responded, "but we are concerned that prescriptive and costly rules that limit the creative offerings and competitive nature of the industry may threaten to offset these positive trends."

On Wednesday, FCC Chair Julius Genachowski laid out the scope of the bill shock problem at a talk before the Center for American Progress. His remarks anticipated these concerns:

"I know that some will argue this is unnecessary or burdensome," Genachowski told the gathering. "But consider what I heard this morning from a business executive. He said that a couple of months ago he had incurred $2,000 in extra data charges while on a trip overseas, despite buying an 'international plan'—in his words he was billed for—quote—'more than 15 times what I had expected to pay.' He said: 'It took hiring a lawyer to get the charges waived - cost me almost as much as the charges, but I did it for the principle.' Most Americans would not have his luxury."

Matthew Lasar
Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz. Emailmatthew.lasar@arstechnica.com//Twitter@matthewlasar

58 Reader Comments

I don't really have much sympathy for people who go over in text messages per month. Its not difficult to keep track of how many you have sent or received. However, I do think roaming charges, especially data roaming charges, should be somehow restricted. Even in places in the US you may go on roaming and may incur crazy charges if you aren't vigilant. These type of roaming charges should bring up some type of warning or data stoppage until the customer verifies that they indeed do want to do this.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

If the cell phone companies don't like it, maybe they should have stopped billing $68,505 for a service that normally costs $68 - a discrepancy so ridiculous that even Rod Sterling wouldn't have believed it.

SMS also needs to be revisited:1. Users shouldn't have to pay for incoming SMS, which they have no control over.2. Sending "STOP" SMS to request opt-out should be free.3. Enhanced SMS, which is supposed to be used for multimedia contents, such as ringtone, are often abused by scammers to sell useless SMS subscription. That should also be stopped or made more explicit (carrier sending a free SMS that says "you are about to be charged certain amount for this SMS, continue?).

Jeez people. Congress really? Just sue the bastards or simply leave these companies and I bet if Ars and other's talked about it enough...these companies would change.

Example. Look at T-Mobile. They have lock downs and limits for texts and voice / data. Back when I had a regional plan (5 years ago) T-Mobile billed me 400.00 bucks for 100 min on the border of my region. I wasn't technically out of my area but the tower was. I told them eat it or lose my biz forever. They ate it. It's not my job to keep tabs on what tower the cell phone uses. I can only keep track of where I am and I wasn't out of my State.

They offered to reduce to 40 bucks. I said nope. I am not paying anything based on the conditions of contract. During a contract if you have two rates for something you can argue by law that the party billing has a reasonable responsibility to contact to you when you have switched rates. That law is applicable in all 50 states. It's also very easy to get a motion to compel arbitration from the courts. At least in Texas.

When I mentioned arbitration was very easy to compel in Texas they said forget about it.

Get tough. Don't raise your voice or say "lawyers". Just stay calm and remember you simply disagree with the "switching" and that in no way are you "required" to pay anything if you disagree with EXECUTION of terms and conditions of the contract.

When I mentioned arbitration was very easy to compel in Texas they said forget about it.

I'm surprised they were scared at all of arbitration. Every time I see a cell (or most any other end user type) contract they always say that you forfeit your rights to sue the company in a court and that you must use "binding arbitration", which I always read as "if you have a complaint, you go to T-Mobile Court and Judge T-Mobile finds in favor of T-Mobile every time".

It's yet another EULA bullshit thing that companies get away with because literally all of them do it, so you don't really have a choice.

To me, it's not so much the notification that you're going over, or doing something that will cost money (though there is that), it's that even if I do get a notification, I have no idea how much it will cost. For example, I took a trip to West Virginia a while back, and hit roaming areas a few times where I had to make calls. I figured since I didn't have a lot of choice, I'd suck it up and pay the extra charges (I figured they couldn't be more than a few extra dollars). Turns out I never saw any charges at all for it. That's nice, but the point is that we have *no idea* what we will be charged when we see "roaming" on our phone. You can't make any kind of decision if you don't know what the price is, but it could be anywhere from free to something absurd like $50 per minute.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

You are joking? Hell, that is impossible even for a TEENAGER to do. They are going to have other things to do other than text people..... like actually going out and talking to people!

If I found out that many messages were sent and it came out to that often? I would be SERIOUSLY skeptical that all of those charges were legitimate charges!

nekonari wrote:

this is besides the point, but can we also get the same thing for medical bills? I never knew nor anyone tell me that allergy test is not covered with my insurance and was billed $700....

700 dollars is NOT unheard of, however I am wondering why your insurance wouldn't cover it. If a doctor says that it is medically necessary because you are having problems and they need to find out what you are allergic to, in most states they HAVE to cover that.If your insurance DIDN'T cover that, the doctor should have told you BEFORE doing the test that it was going to be 700 dollars.You have a very good case if you wanted to sue the doctor or the insurance for not telling you that beforehand.

this is besides the point, but can we also get the same thing for medical bills? I never knew nor anyone tell me that allergy test is not covered with my insurance and was billed $700....

Yeah, wait until you get checked into a hospital through the emergency room with something reasonable like pneumonia and then your insurance denies the hospital's payment claims because your 'visit' was not referred by your PCP.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

You are joking? Hell, that is impossible even for a TEENAGER to do. They are going to have other things to do other than text people..... like actually going out and talking to people!

If I found out that many messages were sent and it came out to that often? I would be SERIOUSLY skeptical that all of those charges were legitimate charges!

It's easier than you might think. You get charged for both incoming and outgoing...it's not that hard to imagine a group of friends texting around and incurring enormous numbers of texts within a very short period of time. In 5 minutes, you could trade a total of 100 messages.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

You are joking? Hell, that is impossible even for a TEENAGER to do. They are going to have other things to do other than text people..... like actually going out and talking to people!

If I found out that many messages were sent and it came out to that often? I would be SERIOUSLY skeptical that all of those charges were legitimate charges!

It's easier than you might think. You get charged for both incoming and outgoing...it's not that hard to imagine a group of friends texting around and incurring enormous numbers of texts within a very short period of time. In 5 minutes, you could trade a total of 100 messages.

5 minutes, 100 messages? Sorry, but even my teenage cousins who have cell phones with text cannot do that many messages, unless they are maybe 20 character at most messages.Heck, my one cousin was bashed upon by her parents for texting a lot.... she was only sending about 1 text every 2 minutes when she wasn't busy, which was only about a grand total of an hour a day!

Maybe it's simply time to make text messages... GASP! UNLIMITED seeing as how they use MUCH LESS bandwidth than a REGULAR PHONE CALL!

When I mentioned arbitration was very easy to compel in Texas they said forget about it.

I'm surprised they were scared at all of arbitration. Every time I see a cell (or most any other end user type) contract they always say that you forfeit your rights to sue the company in a court and that you must use "binding arbitration", which I always read as "if you have a complaint, you go to T-Mobile Court and Judge T-Mobile finds in favor of T-Mobile every time".

It's yet another EULA bullshit thing that companies get away with because literally all of them do it, so you don't really have a choice.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

I talked to a woman once who was complaining about her kid sending a crazy amount of text messages... being a geek, I pulled out a calculator and found that, texting 16 hours per day (assuming 8 hours of sleep) she had to have sent a text message almost every other minute of every day (including weekends) for the whole month (30 day month). Yup... it was something like 12000+ text messages for the month. The bill was over $1000, IIRC.

You are joking? Hell, that is impossible even for a TEENAGER to do. They are going to have other things to do other than text people..... like actually going out and talking to people!

If I found out that many messages were sent and it came out to that often? I would be SERIOUSLY skeptical that all of those charges were legitimate charges!

They were probably sending SMS blasts out to their entire address book. You know, I'm sure you habitually sent stuff like "LOL. Sarahs sxin Jimmy in teh lckr rm" to everyone in your phone book when you were a teenager, too. When your phone's phone book consists of half the kids at the school, it adds up.

I don't really have much sympathy for people who go over in text messages per month.

I have a problem with the carriers charging *at all* for text messages, much less charging both the sender *and* the recipient for the same message.

160 characters (bytes) @ $0.20 = 1.25 milli-cents per byte

Now, I'm already paying $30/month for up to 2GBytes worth of internet data. That works out to 15 *nano*-cents per byte. Do you really need to charge me for text messaging on top of that? Why does a text message byte cost so much more than an "internet byte?

5 minutes, 100 messages? Sorry, but even my teenage cousins who have cell phones with text cannot do that many messages, unless they are maybe 20 character at most messages.Heck, my one cousin was bashed upon by her parents for texting a lot.... she was only sending about 1 text every 2 minutes when she wasn't busy, which was only about a grand total of an hour a day!

Maybe it's simply time to make text messages... GASP! UNLIMITED seeing as how they use MUCH LESS bandwidth than a REGULAR PHONE CALL!

I didn't say it was common. Merely that it was possible, and not even all that crazy (though it's not what I'd call normal, even for a youngster). You said it was impossible, and I think you drastically overestimate how hard it is to send a burst of a LOT of text messages in a fairly short period of time.

I don't really have much sympathy for people who go over in text messages per month.

I have a problem with the carriers charging *at all* for text messages, much less charging both the sender *and* the recipient for the same message.

160 characters (bytes) @ $0.20 = 1.25 milli-cents per byte

Now, I'm already paying $30/month for up to 2GBytes worth of internet data. That works out to 15 *nano*-cents per byte. Do you really need to charge me for text messaging on top of that? Why does a text message byte cost so much more than an "internet byte?

Especially considering that SMS is sideband data that is quite literally free for them (aside from handoff between carriers), because it just piggybacks on the voice packet switching headers (IIRC).

Basically they charge for it because they can get away with charging for it. As more people start using texting, SMS costs go up.

As it turns out, if you aren't on a plan of some sort, sending a text message costs about 200x times that of sending the same stuff by snail mail. Using your ISP's monthly data volume for text messaging would cost you a cool $61 million. Despite the fact that text messaging was specifically designed to fit into the 'gaps' of mobile transmission, thus costing the companies very close to NOTHING to provide the service.

For all those Internet Libertarians, this is why we need hard regulation. Because the free market works very nicely in theory; but in the real world where oligopolies a quick to form, screwing the public becomes very easy.

I can see it now. FCC mandates that cellular companies have to send you a text message alerting you to when you near your limits of texts for that billing cycle. . .which they charge you for. They then decide to be generous and text you again as soon as you've passed your text limit. . .which they charge you for and the overage cost now. And they'll text you again once you've incurred $10 of overage costs in texts. . .ad nauseum.

I'm sure they could find a way to do the same with minutes (they have an automated call that goes out to you that when you answer it's the robovoice telling you how close you are or how over you are on your limit. . .which will count against your minutes listening to it), as well as data plans (email or some other method).

The instant that the cell phone companies realize how they can turn this in their favor, I'm personally slapping every FCC person upside the head for not spelling it out like for an idiot to the cell phone companies to close all loopholes.

"We agree with the FCC that the goal is to keep all customers happy," CTIA - The Wireless Association responded, "but we are concerned that prescriptive and costly rules that limit the creative offerings and competitive nature of the industry may threaten to offset these positive trends."

Am I the only one who doesn't really mind that their "creative offerings" be limited?

Considering how screwed up the whole cellphone market is in the US, I don't think they really should be allowed to get more creative than they already have.

Stuff like double-billing SMS's would NEVER fly in Europe. At least not in Denmark.

Also, the mess of incompatible networks and wildly varying degrees of coverage is alien to much of Europe. "Roaming" is free in Denmark - as long as you're on a danish network, it costs the same whatever you use, and you usually have good or very good basic coverage.

Going over the border will cost you, though. Especially for data. The EU has capped the rates now, but they are still crazy high.

As for the amount of texts some people send, remember that longer texts get chopped into multiple texts, and also that MMS's (err... those you can put pictures and audio in, not sure what you guys call them), are probably more expensive, so they'd help up the total cost and make it difficult to asses the number of texts sent, based purely on the size of the bill.

Limit the tools they create to help consumers? That's unpossible. All this says to me is that the cell company has to send a text/voice message stating the customer is going over their limit, it doesn't say that's all they have to do. the cell company is certainly free to do more than that. The problem, I think, lies in the fact that the cell company can't charge a customer for this service.

And I personally don't see why a plan that says you get 25MB of data(for example) for a specific rate doesn't just stop at 25MB of data. If I pay 5 dollars for 25MBs then at 25MBs it stops and a message pops up that says I've reached my max data usage for that month. Not that hard to do since they track the usage already.

But the cell company doesn't like to do that because then they lose the profits from charging people overage fees. It's BS, and it should be regulated imo.

There's no reason why cell companies cannot do this at this time. And if they're not going to do it then they need to tell their customer when they are reaching their max so that person can know whether to allow the overage or stop the transmission. Or purchase a better plan even.

Think of it, a customor gets a letter or phone call or text message that says "We notice you've been using more than your plan allows, would you like to upgrade to this plan that offers this much more service for x dollars more than your current plan. It might be beneficial to you to change". It would be like perpetual upsell utopia.

this is besides the point, but can we also get the same thing for medical bills? I never knew nor anyone tell me that allergy test is not covered with my insurance and was billed $700....

poor American's and their sucky healthcare.

It's actually quite good...because it's not rationed. yet.

This aside, what is up with people being unable to accept responsibility in this country. You know the rules, but don't want them to apply to you. I feel sorry for exactly zero people with "bill shock". Next thing you know it will become a medical condition. IBCS. I've been cheated syndrome. Sorry...and get over it. EVERYONE knows that using your phone in Mexico isn't the best thing to do w/out an international plan.

As it turns out, if you aren't on a plan of some sort, sending a text message costs about 200x times that of sending the same stuff by snail mail. Using your ISP's monthly data volume for text messaging would cost you a cool $61 million. Despite the fact that text messaging was specifically designed to fit into the 'gaps' of mobile transmission, thus costing the companies very close to NOTHING to provide the service.

For all those Internet Libertarians, this is why we need hard regulation. Because the free market works very nicely in theory; but in the real world where oligopolies a quick to form, screwing the public becomes very easy.

So, because something theoretically costs "NOTHING" a company cannot charge for it? Did they not have to set up a network? Do they pay to keep the lights on at the company? The answer is very simple, if you don't want to pay for stuff, don't use it. Text message pricing is pretty much as up front as you can get...just because you don't like the costs, doesn't mean that there is anything wrong with it. I mean, I would like a Bentley, and their costs aren't nearly as much as they charge for the car. I should have the government take a look at why they cost so darn much.

In his comments, he acknowledged those 764 bill shock complaints in the agency's new report. But, "although that made it into the white paper, America is home to an estimated 295 million mobile wireless subscribers," McDowell noted. His point: bill shock should be considered "in the context of all of the data that is currently available."

Yes, can we do the math, or do we have to, in order to see what an incredible, unbelievably low amount of complaints that is over a six month period?

municipalis wrote:

For all those Internet Libertarians, this is why we need hard regulation. Because the free market works very nicely in theory; but in the real world where oligopolies a quick to form, screwing the public becomes very easy.

this is besides the point, but can we also get the same thing for medical bills? I never knew nor anyone tell me that allergy test is not covered with my insurance and was billed $700....

poor American's and their sucky healthcare.

It's actually quite good...because it's not rationed. yet.

This aside, what is up with people being unable to accept responsibility in this country. You know the rules, but don't want them to apply to you. I feel sorry for exactly zero people with "bill shock". Next thing you know it will become a medical condition. IBCS. I've been cheated syndrome. Sorry...and get over it. EVERYONE knows that using your phone in Mexico isn't the best thing to do w/out an international plan.

Obvious troll ignores story point which specifically deals with an internation plan. Is obvious.

Who in there right mind pays for SMS on a per text basis when unlimited plans are so cheap? On my family's Verizion plan, texting costs only 5$ per line, which is a good thing because my little brother sends and recieves over 10K texts per month.

As it turns out, if you aren't on a plan of some sort, sending a text message costs about 200x times that of sending the same stuff by snail mail. Using your ISP's monthly data volume for text messaging would cost you a cool $61 million. Despite the fact that text messaging was specifically designed to fit into the 'gaps' of mobile transmission, thus costing the companies very close to NOTHING to provide the service.

For all those Internet Libertarians, this is why we need hard regulation. Because the free market works very nicely in theory; but in the real world where oligopolies a quick to form, screwing the public becomes very easy.

So, because something theoretically costs "NOTHING" a company cannot charge for it? Did they not have to set up a network? Do they pay to keep the lights on at the company? The answer is very simple, if you don't want to pay for stuff, don't use it. Text message pricing is pretty much as up front as you can get...just because you don't like the costs, doesn't mean that there is anything wrong with it. I mean, I would like a Bentley, and their costs aren't nearly as much as they charge for the car. I should have the government take a look at why they cost so darn much.

No, but if something costs essentially nothing then one would think that if competition existed in the market then the price for it would eventually approach nothing. The fact that the companies charge what they do for what is essentially a "free" service (which is to say the marginal cost per message is nearly zero cents) is evidence of an oligopoly, if not outright collusion.

Same way I laugh when nearly all the complaints about this regulation fall into the "omg I have to pay more because people are irresponsible?" camp. The marginal cost of implementing any of these changes is essentially zero, per customer, so if your bill goes up at all due to these regulations then that is, again, evidence that the market is failing. Thus proving the need for regulation.

ilves wrote:

I don't really have much sympathy for people who go over in text messages per month. Its not difficult to keep track of how many you have sent or received. However, I do think roaming charges, especially data roaming charges, should be somehow restricted. Even in places in the US you may go on roaming and may incur crazy charges if you aren't vigilant. These type of roaming charges should bring up some type of warning or data stoppage until the customer verifies that they indeed do want to do this.

Maybe your provider is much different than mine, but it's no more (or less) difficult to track data on my plan than it is texts. So why are texters required to simply be responsible, while data plan users are not? Every plan should offer the option to stop service once caps are reached, and require active verification before going over and incurring the (absurd) overage rates. On everything...voice, txt, data, everything.

So, because something theoretically costs "NOTHING" a company cannot charge for it? Did they not have to set up a network? Do they pay to keep the lights on at the company? The answer is very simple, if you don't want to pay for stuff, don't use it. Text message pricing is pretty much as up front as you can get...just because you don't like the costs, doesn't mean that there is anything wrong with it. I mean, I would like a Bentley, and their costs aren't nearly as much as they charge for the car. I should have the government take a look at why they cost so darn much.

I have no problem with companies charging for text messages, even if it costs them nothing to provide. However, I have every right to complain about the rate they do it at, especially when that rate is egregiously expensive compared to other services. I also have every right to question whether the price they charge is indicative of oligopolistic practices. When they continue to RAISE the rate of SMS despite it not costing anything to them, I think there's a pretty good case to say that the market isn't doing its job.

Your car analogy is incredibly naive. If I can't afford to drive a Bentley, I can go to another car company and buy a much cheaper car which performs the same function a Bentley does - get me from A to B. The auto industry is not super-competitive, but there are enough players to provide me, the consumer, with a wide range of options depending on how much I'm willing to pay. You'd have a point if there were a few companies offering cheaper SMS service, but plainer phones or something. But there's not. For SMS messaging, the market is dominated by a few companies who control government-protected infrastructure resources and effectively block out real competition. Since there's a practical limit to the underlying infrastructure, the only solution is for some good, ole' fashion trust-busting.

Outrageous and completely insane charges like this are not only grossly unfair, they are also counter-productive to the phone companies.

Most people I know avoid using their mobiles abroad – specifically to avoid this problem.(or they very-strictly ration such usage)

If they actually charged at more sensible rates, they would get significantly increased sales.The phone companies in this case are trying to be far too greedy – and they are cutting their own throats in the process – which is no less then they deserve for charging such outrageous international rates in the first place.

They would actually make a nice profit by charging only a modest fee– Such that you would use the service without first having to think about it – and deciding otherwise.– Really it should not be much more then for domestic rates.

The 'super premium rates' charged are shear madness – and should be legislated against if the phone companies won't do it themselves – these kind of rates are a complete rip off.

You know, most phones now days come with an application for this thing called e-mail. It costs less than a cent to send (even to international recipients), encrypted and comes without a character limit. Bonus if you have exchange account.

There is also applications like Skype that can also run in the background with bonus no charge to talk to other Skype users.

More companies should take a note from Sprint. I pay $70 a month for unlimited sms, unlimited calls to cell phones on any network, and unlimited data.As for bill shock, sure, I got it a few times. That was also back when I smoked a ton of pot and was very irresponsible with my money.You have to be a savvy customer. My phone notified me when I would attempt to use data while roaming. Just to make sure I wouldn't incur hidden charges, I called a Sprint rep and they assured me that I was free to use data while roaming without charge. Let's say I didn't check, and let's say Sprint did charge an arm and a leg for roaming data. If my bill was a few hundred over as a result, whose fault would that have been? The evil phone company? No. It would have been my fault for not being diligent.It's easy to hate on the big corps, but as was mentioned, people need to take more responsibility.